Ethical Breaches at News of the World
| Case Code: BECG119 Case Length: 15 Pages Period: 2011 Pub Date: 2012 Teaching Note: Available |
Price: Rs.500 Organization: News Corp., News of The World Industry: Newspaper Countries: UK Themes: Business Ethics, Media Ethics, Corporate Governance |
Abstract Case Intro 1 Case Intro 2 Excerpts
Excerpts
Questionable Practices
In its heydays, NOTW took to the path of yellow journalism to increase its circulation and to grow at a faster pace. The editors and the journalists of NOTW used questionable means to obtain information and generated sensational stories to woo the public. Very soon, NOTW became the source of news about scandals and crimes. The cheap price at which it came was also one of the reasons for its success. It was affordable and became popular among middle income grade literates. Some observers believed that the tabloid did not maintain a balance between serious and sleazy news and said that for the NOTW journalists, ethics always took a backseat. The journalists gave ethics the go by when the phones were hacked as they were more interested in obtaining information which their rivals could not get...
The Scandal
The Guardian had reported in July 2011 that NOTW had hacked the phones and voicemails of Milly Dowler, relatives of deceased British soldiers, and relatives of the victims of the London bombings. The disclosures, which were reported first in The Guardian, generated a huge public outcry and proved to be a turning point for the NOTW in the hacking incident which occurred way back in 2002. Earlier in January 2007, police investigations had revealed that NOTW had made it a routine practice to hack cell phones. Though it had had to pay huge sums of money as defamation charges, it still did not stop these questionable practices. For instance, the newspaper had paid defamation charges to many people who had been victims of its hackings and scandals...
Phone Hacking
After The Guardian report in July 2011, there was a general perception that practices such as phone hacking was widespread in NOTW even before the hacking scandal came to the forefront. According to the report, in 2002, the tabloid hacked the mobile phone of Milly Dowler. The girl, who had gone missing, was found murdered six months later. The reporters of NOTW not only hacked the phone of the girl but also kept deleting old messages from her phone in order to receive new messages. By doing that they confused the investigating police officials and family members, leading them to hope that MiIly was still alive...
Bribery
The NOTW reporters paid bribes to police officers to learn and use the technology which police used exclusively for investigating cases related to hacking of cell phones of terror activists and for high profile investigations. 'Pinging', a technique used by the police, traced the location of a cell phone user depending on the signal strength. A former reporter of NOTW, Sean Hoare, said that they used the Pinging technique in NOTW and paid the police officials US$500 per trace. By January 2011, the Metropolitan Police had gathered details of the payments made by NOTW, during the period when Andy Coulson was the paper’s editor, to the senior police officers who were investigating the phone hacking case between 2003 and 2007...
Government Scrutiny
In 1998, phone hacking was made illegal and lack of self regulation in law and journalism ethics was regarded as a serious offence in the UK. Further, the Department of Justice had also opened an investigation into the company affairs. The UK Regulation of investigatory Powers Act 2000 prohibited phone hacking and any form of communication interception. The UK Inquiries Act 2005 was passed to address any scandal without delay and also studied measures to prevent repetition of such scandals. A parliamentary committee of the UK also had investigated the phone tapping. The Federal Bureau of Investigation of the US also conducted investigations to find out whether the phones of the September 11 victims had been hacked...
British Sky Broadcasting Takeover Deal Falls Through
Amidst this brouhaha, News Corp.'s British Sky Broadcasting (BSkyB) takeover bid of June 2010 was called off in July 2011. BSkyB, headquartered in London, was formed in 1990 as a satellite broadcasting and telephony services company with its operations in the UK and Ireland. It was formed by an equal merger of Sky Television and British Satellite Broadcasting and by 2010 it had almost 10 million subscribers. New Corp, which already had a 39.4% stake in BSkyB began its £7.4 billion bid for a complete takeover of the broadcaster in June 2010. Approvals from the European Commission were obtained in November 2010. Top industry players and media groups, however, feared that the largest UK paper and the largest broadcaster would together pose a threat to competition in the business and raised issues of 'media plurality'...
The Judgement Day
The investigators pooled evidence against NOTW to claim that the newspaper had deleted all its previous mail conversations from its mail archives to interrupt further investigations by Scotland Yard . NOTW was charged with being non-cooperative with the investigating officers. The archive mails from 2005 could not be retrieved. According to the investigators, a senior executive had deleted emails twice, including once in January 2011, as Scotland Yard was starting its investigation . Later, Brooks stated in an e-mail that, "If the allegations are proved to be true then I can promise the strongest possible action will be taken as this company will not tolerate such disgraceful behavior."...
What Happens Next?
The NOTW announced that all the sale proceeds from its last issue would be donated to charity. The corporation expressed optimism and said: “When this outrage has been atoned, we hope history will eventually judge us on all our years." The closure of the tabloid was followed by the arrest of key executives at News Corp. such as Brooks on charges of corruption and bribing the police, and also led to huge criticism of the management at News Corps. According to Richard Greenfield, a media industry analyst with BTIG , a New York-based trading firm, "The newspaper business was such a small pimple for them. Now it's become a hot potato." Many wondered how much the management had known about the questionable practices being adopted at NOTW and how far the rot had set in in the News Corp. chain of command. Some even wondered whether it was a reflection of the company’s overall culture...
Exhibits
Exhibit I: A Collage of the First Edition and the Last Edition of the News of the World
Exhibit II: The Apology Statement Issued by Rupert Murdoch, which Appeared in all Leading National Newspapers
Exhibit III: List of Business Units Owned by News Corp.
Exhibit IV: List of News Corporation's Senior Executives
Exhibit V: Timeline of the Phone Hacking Scandal
Exhibit VI: Three-year Stock Chart of News Corporation (2009-2011)
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